Free Estimate... How much does it cost to a contractor?

6/2/2012 at 4:47:40 PM

You are good

6/2/2012 at 4:49:12 PM

How mutch does it cost? Gas money, your time, and your knowledge !

The thing is you can't charge them for the first visit , and if you do give them a free estimate and land the job then you should bill them for your time in the quote. Never work for free..... You are going to run into your tire kickers- this website is full of them - but , just do your best at qualifying your customer first through email or phone. Have a set price that works for you and don't go lower. Because you end up working for free!

Good luck !

Matt.

6/2/2012 at 4:50:19 PM

Alex,

I think you are mislead by "free estimate". This has nothing to do with someone that needs to keep busy in the office waiting for phone calls. Most of the time, estimates are done by the owner or someone highly educated within the sales team. If they do not fully understand the concept of the job, the company loses BIG TIME! Who is to blame? The guy who did the estimate. Did you know some electrical estimators in the electrical field can make up to $110,000 per year while the head journeyman on site may only make $90,000.

It is usually their job to ensure every last pipe is accounted for and every man-hour is used to the best job. If a light installing man is put in the job of the underground pipe guy, count the job as a lost one as most men are placed in their best position to make the company benefit from their skills 100%. Imagine your favourite sports team putting their best player in the wrong place. Bad choice.

Most new contractors think this is the easy part of the job, truth is, this is the place where the boss is pulling his hair out and going back to the client asking for more money because the job quoted was under bid, leading to many topics already covered in this forum area.... CONTRACTORS ASKING CLIENTS FOR MORE MONEY TO MAKE UP FOR THEIR MISTAKES.

Free estimates are normally lost money that may be put into the job so it is not free. It is only free if the customer does not use that company who provided the free estimate, which is normally 1 in 4, so three lose that estimate in labour, gas, etc, normally costing each time $200-$300

6/2/2012 at 5:54:02 PM

This is a very good question and can become a vexing issue, as I've found. They aren't really free. They always cost me money! If I drive all over Niagara and don't land any of the jobs, I am totally out of pocket. My gas and time aren't free. Sometimes, if the person is just too far away, I tell them to send me some pictures of the floor and the dimensions of the areas to be worked on, and I explain it is too far to go for an estimate.

I think it might also be helpful to have a list of questions to ask a home owner who wants a free estimate such as when they want the work to be done. Nothing like driving 50 miles for a free estimate only to find out they need the work done in 2 weeks and your trip has been for nothing. I will tell them up front what my base fee is. That is often enough to scare off someone who is not a serious shopper. I would welcome other ideas.

--

Craig A. Mouldey

Face Lift Floors

6/2/2012 at 6:30:28 PM

Free estimate

Generally you can size up customers and weed out the "tire kickers" as they have been called because these people often mention that they want a free estimate in the first couple of sentences of their call. These people are generally shopping on price, and unless you are the lowest-cost supplier of a given good or service, or very hungry, you'll end up working for very little reward

An estimate is just that, an approximate cost to carry out a given project, based on a summary evaluation of the parameters proposed. In my case it summed up as the following. I'll tell you the ball park in which you'll be playing and you say if you want to be in that same ball park. If we have a meeting of minds (budget and cost) then we can go forward with a written recommendation or a proposal, always wuith the knowledge that if anything changes (design, materials, finishes, or existing conditions affecting the work) then the overall cost of the project will also be affected.

In the case of a straightforward project (replacng a door, siding an existing structure, installing a roof. many of the variables are known or can be predicted with a fair amount of accuracy. A written proposal can then be delivered with confidence. Of course if the client is simply buying on price, the winner is the one who eith er bids lowest (reverse auction) or who holds back and raises the price after work begins (This is gonna be extra...) How many times have wewe seen a contractor walk off the job (often citing an excuse - injury, personal tragedy, or some such) when a better paying job comes along? Or a customer who complains the contractor's price kept going up?

In the case of a complex project, encompassing several items, I simply tell clients that an accurate evaluation will require an in-depth study be carried out. People would expect to pay an engineer or an architect for their evaluations and expertise. I tell them that my knowledge is as valuable and that a complex proposal will be happily delivered, while establishing that there will be a cost. The client is then free to hire me to evaluate their project and establish a working relationship between us, or to keep looking for someone who is willing to work for free. I don't have to give my franchise (intellectual property, experience and knowledge) away for free.

Jacques Bouchard

Stellium Renovations

6/2/2012 at 7:00:19 PM

When you do an estimate for a potential customer establish some guidelines. First find out when they want to start and complete. This should give you an idea if they are just fishing for ideas or wasting your time ( If they don't know or won't give you an answer that should send up some red flags).

When you are talking to them the first time go over many possibilities (i.e. various materials, etc.) and do your first estimate with pricing for each possibility so you may save having to do several estimates. If they do want another estimate and you can make a few changes to the already existing one that's fine but if they want a completely new one I'd be a little leary. I never give detailed estimates or invoices I only break it down to labor and materials.

If after several (3's the charm for me) attempts to meet the customers wishes draw your line in the sand and get to the deposit to move forward stage. This is where you will get your real answer and if it's no then you probably don't want to deal with them anyway ( because if they are that difficult at this point what will they be like to work for?).

But really when all is said and done am I gonna put in this much effort to make $500.00 or $1000.00? The bottom line is do the numbers add up for you. Is the gain worth the effort. That is the question to ask yourself?

6/2/2012 at 8:22:42 PM

A free estimate costs you your time. As already stated here, if it is extremely detailed, you need a sit down to explain the lay of the land to the client- that is it is going to eat up a lot of your as well as others time. If you feel the client is sincere, move forward. If the talk revolves around price to often, say goodbye.

I never ballpark prices in front of clients- I let them know that if they are serious about the project, a detailed estimate will benefit them as well as me. Serious client have already done their homework- that's why they called you. If a client insists on a ballpark, I tell them it should run anywhere from $20 to $180000.00, or somewhere thereabouts .

6/2/2012 at 9:00:30 PM

I have battled with this dilema for along time, what ends up happening is your actual customers pay for all the other people that didn't go with you.

What we are starting to do is give free estimates only in certain locations. In other areas we charge a $ 50 fee that is applied to the invoice if they end up using us. Sure gets rid of the tire kickers

6/2/2012 at 9:03:25 PM

Free Estimate days are over I have been waithing a long time for this one... We are used by the end user they use us to shop arround and pick our brains basicly which should be considered as a consultation fee. what I started doing is charging and I hope that every other contractor out there using common sence starts doing the samething .

Here is what I do I charge a $50.00 fee if it's a new client, the $50.00 is waved if I get the job and discounted on the total..We need to start thinking that gas is no cheap and the time it takes to provide them with a detailed quote is not free .Also this will give you an idea if the client is serious about the work they want to do or just shopping arround.I have 2 licenses as a general contractor and a 5mil liability insurance ...

Free ESTIMATE its in the past wake up start charging you will safe money and time if they are serious they will pay you... It works. Try it....but it will work better if everyone out there does it...keep in mind that I do not. Charge customer that have been refered by existing clients..

6/3/2012 at 12:44:29 AM

Want to get your foot in the door? Offer Free Estimates. Nothing is free! Keep track of all of your estimating costs for the year. Apply these costs accordingly the following year as overhead. Now your doing Free Estimates for everyone and the projects you have done that year have paid for them.

As people continue to abuse the free estimate system they drive the cost of doing a single project up. If they don't use the program appropriately, over time, the cost of the project by good contractors gets so expensive their only alternative is to hire so called sub par contractors and they will get what they pay for. Make sense.

Your estimates should include as much detail as possible. Supply to your customer everything they are looking for and more they never thought of. That's why they are coming to you.

6/3/2012 at 10:01:27 AM

Nothing is free.....time is money, however a contractor gets awarded nothing if cannot produce a winning proposal and reasonable budget. The customer is "free" to choose the best proposal, based upon the presentations he or she sought. If the customer was thorough and clear about their desired outcome, it makes the job easier for the contractor to produce a winning bid.

When several proposals are accumulated, and the customer sees that all the numbers fall within a close range of each other, then it often comes down to "character " analysis.....ie judging the best presentation based upon what level of trust the customer feels with the contractor....and a personality fit to achieve the desired results working as a team.

This is how the free market system functions best.....for the contractor, this is what is meant by the saying, " adaptation is the hallmark of the species" ----- and the winner is !!!!

6/3/2012 at 11:16:33 AM

I normally do the first estimate for free, However, when preparing the quote I account for my time and build it into the quote to recover my costs. You don't get every job but at least with the ones you do get you get something for your time.

Someone mentioned tire kickers in one of their posts, I agree there are a lot of them here. Try to spend some time on the phone first to get a feel of how commited they are, what their budget is, and also ask how many other contractors are giving them a price. It eliminates a lot of headaches.

I try not to be too detailed in the quotation, If they call back and ask for specifics on your quote you know that you are in the ball game.

Estimates cost time and money. It is a part of doing business for most of us. Get used to it.. They can be a pain. At least the phone is ringing. Some guys I have spoken to over the last month or so are not getting any calls at all.

Dave

6/3/2012 at 12:39:01 PM

Well, it is nice to see that I am not the only one who thinks this way. I cannot stand this free estimate system we have right now. I have to agree with every single point outlined in the original post. I feel that an estimate should be a minimum of $50, if you sign on with that contractor then the cost of the $50 plus tax will come of the final invoice.

I use to do installs for Home Depot and Lowes and they charged for their estimates, to the toll of $75 which I received even if they do not hire me for the project. It is a much better system this way and eliminates a lot of the "tire Kickers".

If someone askes for my plans or designs I charge them $250 and that comes of the end price once signed. That being said, how can this system turn around? How can a system that has gone on for so long be reversed. I have done as much as 7 revisions on contracts which the client either ended up going with someone else, canceled the project or reduced it by so much that the end project was not worth my time to even get involved. To regain the amount of time and energy spent pricing would not be worth it. I am a small company who has been in business for 10 years & estimates take time, especially when they are detailed.

I believe a new system needs to be brought into the market & get rid of all these non licensed, non insured companies used unlicensed trades resulting in drastic undercuts which affects the market. If you have to pay for insurance, WSIB, a licence then you have an overhead that needs to be taken into consideration with the pricing of the project. You cannot compare a contractor using a licensed plumber against someone using a helper who does the framing/drywall/plumbing/tiling/electrical. This system out there at the moment is so backwards & is completely one sided, the contractors are taking the hit for this and its just not fair.

I have a question, when you go into the dentists office, the lawyers, the barber do you haggle their rates down? Are you able to get the job done then negotiate the price? No, so why is it that our industry is always being talked down in price? We are not selling spices at a market & our rates should be set in stone. This backwards way of working is the main reason why I want to get out of dealing with the public sector and be a builder making me the client.

6/3/2012 at 2:05:54 PM

Yes, I agree, some interesting and valid points have been made here.

We do live in a world created by our past business methods and procedures.To change things now would be difficult. It seems the only answer is for each of us to decide our own method of making quotations.I have noticed that the more in demand a contractor is the less of a problem this becomes and maybe the less of a problem we make this in our minds the less of an issue it is.

I think the pre-screening of customers on the phone and asking questions about the customers plans and the number of quotes they are looking for will help a lot.

I did a quote once and spent most of the day with the customer.I came back for another appointment with some quote information only to find out the customer didn't have any money so had signed with another co. that offered full financing. Obviously i made a number of errors here.Added to that I did the quote on the first appointment with only one member of the couple who was not the wage earner. I tried to tell myself it was the price of an education.

I now try to get any kind of real money in my hand before I go too far.I think you can tell pretty quickly if the customer is on your side or if they are not.Thats when its time to make your decision to ask for the money or move on.Once the customer has made an investment a kind of partnership or bond develops and the job proceeds.

Thanks for sharing your thoughts,

Spencer

6/3/2012 at 4:53:11 PM

We have started doing the same thing of late $49.00 Site Visit Fee and if you go ahead we credit this off your bill.

The GTA is way too big and the costs are way to high to do this for free anymore. Each Contractor adds knowledge to the end buyer and they need to start to pay for it. It again takes away the Tirekickers or people that don't value our time as professionals.

6/13/2012 at 11:42:45 PM

We do "Free Estimates" as well and our estimate, the first one we give on a job is completely based on supply costs, time, fuel, wages everything. We give a final price for the entire job, in our quote we list all the work that is required, all the supplies that is required, absolutely everything including a floor plan if needed. Once we give our final quote it does not change for the duration of the quote validation date. Always put an expiry date on all quotes so that 6 months or a year down the road they do not expect the job to be done for the same price. Supplies, wages and everything else goes up and over time prices on all jobs change.

Also, we have had that where;

"Then the customer asks for some changes because he has not enough funds for the first estimate... Here it comes 2-nd estimate, free again... then the customer decided that he can do some of the work himself and asks to adjust the estimate... If at this stage contractor will say that 3-rd estimate is not free anymore, the customer will say-you offered free estimate, you did not do it"

This is not acceptable, a "Free Estimate" is one and final estimate. If you find a potential customer is pulling this stunt then let them go, they will likely go anyway. Don't waste your time fighting for a job that you will not make money at because they constantly want you to lower your price, if someone else is willing to do it cheaper then chances are they are also willing to do a cheaper job.

Simply "You Get What You Pay For." If a customer chooses to pay for less, then let them have less. It is not easy to compete with big companies that is for sure. However, often the big companies do not give the customer service that us smaller companies do and that is what many people want. Good customer service counts for a lot and "Free Estimates" is a big part of that.

Try to keep possitive, if you get 1 job out of every 5 or even 10 estimates then each job that you do get will often offer the opportunity for more work so long as you do a great job. Word of mouth is a powerful tool for getting work too.

Thank you,

Sherri & Dustin Depatie

Seamless Finishing Inc.

Office : 780-760-3852

Sherri : 780-297-0986

Dustin : 780-885-2231

7/5/2012 at 1:10:46 AM

Thank you so much for great responses!

I hope that this topic helped not only me, but a lot of contractors. The discussion is not over... and never will be, as the contractors are always facing this situation, but the good thing is that we have our loyal customers and repeat business and this is what is priceless in our work.

Thank you !

3/25/2014 at 11:23:43 AM

Ikea kitchens became very popular these days and IKEA offers great discount for the product, but now the customer is responsible to provide the design in IKEA software before purchasing the kitchen. Here is the question: to charge or not to charge for the kitchen design for IKEA cabinets if you are going to install them? It takes considerable amount of time to complete design in IKEA software, plus, the contractor becomes liable for the design and if something is went wrong-it would be contractor's fault. Any ideas from past experience?

Right now I am not charging for the design, but design eats so much time and not always the customer is proceeding with the install...

In the pictures are some IKEA kitchen that my wife Yelena designed and I installed.

6/5/2015 at 12:17:23 PM

Alright, I've read this from all contractors point of view. Now I'm a contractor but of a different kind, I get paid quiet a bit, but I do a lot for free, that is how I build clientele, you say you do nothing for free... Well sometimes it really pays off, competition makes you better at your job.

Well that's disappointing because most people don't have $$$$$$ to spend they only have $$$$ to spend and would like the absolute best for their dollar and not be ripped off too, and I've been there. And some or most contractors won't do jobs unless they are $$$$$$$. Some have done a great deal of research, and know it should be costing a lot less while you still make a great profit.

It's walking a thin line to do things for free. But that's why you do your absolute best to prove you are the one worth going for.

From a consumers point of view, a couple freebies are not bad, but you can limit yourself and not charge people an arm and a leg for the service, just for an estimate they might not even go with.